The up move in the pair could extend further and test the 0.7080 region in the near term, according to FX Strategists at UOB Group.
Key Quotes
24-hour view: “Against our expectation, NZD did not break the major 0.7050 level as it slipped to a low of 0.6997 before rebounding. We continue to see chance for a move above 0.7050 but in view of the weakened momentum, a sustained up-move seems unlikely (the next resistance at 0.7080 is not expected to come into the picture). The low near 0.6995/00 is acting as a solid support now”.
Next 1-3 weeks: “We have held the same view since last Thursday (31 May, spot at 0.6970) that the recovery in NZD “has room to extend to 0.7050″. NZD hit an overnight high of 0.7048 before easing off slightly. The improved undertone suggests that the current rebound could ‘overshoot’ to 0.7080 but at this stage, it is unclear whether NZD can maintain a foothold above this level. On the downside, only a break below 0.6980 (‘key support’ previously at 0.6940) would indicate that the current upward pressure has eased”.
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